WaMu Reverses Decision To Exclude Subprime Losses From Executive Bonus Calculations

Activist shareholders forced big changes at a Washington Mutual stockholder’s meeting last week, especially the reversal of a much-criticized decision to exclude subprime losses when calculating executive bonus pay. Washington Mutual was one of the lenders cavorting the most eagerly in the refuse trough of subprime lending, and has endured some of the largest losses as a result. Other key shareholder wins included splitting the CEO and Chairman position, and the resignation of several key board members. Nice job, activist shareholders, way to wake the hell up long after the damage was done.

Shareholders Score at WaMu [Business Week]
PREVIOUSLY: WaMu Rewrites Executive Bonus Plan To Avoid Subprime Meltdown Responsibility

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  1. laserjobs says:

    YES!!! Take America Back

  2. savvy9999 says:

    So, shareholders enforcing personal responsibility from company officers is now activism?

    Oy.

  3. Sure, but their success validates one of my least-loved and longest-held tenets: if you hate them so much, buy the stock and tell them to knock it off.

  4. zentex says:

    huh…imagine that…shareholders exercising their power over a company to make it more responsible.

    next thing you know voters will make elected officials responsible for their actions.

    what is this c-r-a-z-y world coming to?

  5. mmstk101 says:

    it boggles my mind at how far removed from reality these executives are, to have thought it would be okay to keep their bonuses artificially high while WaMu posts a $1.87 billion dollar losses in the 4th quarter of last year alone . . .

    gah.

  6. bdsakx says:

    I have got to have that t-shirt! I wonder how the tellers would react when I go in to make a deposit at WaMu–they’d probably return the gesture.

  7. skittlbrau says:

    But the real question is… where do I get me one of them shirts?

  8. SkokieGuy says:

    Who else suspects this is smoke and mirrors to appeal to shareholder (and public) outrage?

    When all creative accounting is complete, let’s see just how much these bonuses are really reduced.

  9. backbroken says:

    @mmstk101: It’s not as if they are delusional. Only greedy.

    Many of us would also line our pockets with gold if given the chance. It’s not a matter of good vs evil. It’s just a matter of opportunity. Of course, the masses reserve the right to put a stop to it. Sadly, all too often we don’t.

  10. mmstk101 says:

    @backbroken: true enough. I’m naive for saying so, but it’d be nice to see a little bit more accountability . . . or responsibility.

    “Your company did great? Well, here’s 25 million dollars.”

    “Your company is tanking? Well, here’s a kick in the pants. Don’t let the door hit you on the way out.”

    that’d be sweet.

  11. Imakeholesinu says:

    @zentex:

    Look at the Samsung Execs. They took responsibility also. Must be a flu bug going around.

  12. Anks329 says:

    @savvy9999: any shareholder that is voting, or bringing a proposal to the annual meeting that the current board doesn’t support is called an activist shareholder. It’s just the term used to label such shareholders.

  13. Snarkysnake says:

    The big news here is NOT the bonus money being deep sixed…It’s the splitting of the CEO/Chariman position on the board.

    Now the CEO is just another hired hand.This means that (in theory,anyway) that he/she has to perform or it’s the chairman’s job to find someone who will.The big corporate governance problem over the last couple of decades is that the CEO/Chairman answers to the CEO/Chairman. In other words,nobody.Make no mistake,this is a serious humbling and rebuke to the crapsack that held them (Kerry Killinger).Yay for our team !

  14. Snarkysnake says:

    BTW, Killinger is a dead man walking at WaMu…Look for this non entity to leave sonn to “pursue other opportunities”…

  15. Corydon says:

    @ADismalScience: Isn’t there a requirement to own a certain amount of stock before you can make a proposal? I seem to recall reading in a prospectus recently that every shareholder that put forward a proposal included a statement that they owned at least $2000 or so in stock.

    Otherwise, I can see a future with civil disobedience types all buying a share or two of, say, Comcast or Exxon, and barraging the shareholder meetings with complaints and proposals to fix them.

  16. GotanOrange says:

    @bdsakx: I believe they wouldn’t really care. Why insult the front line workers anyway?

  17. SloppyChris says:

    Capitalism works!

    So long as the government doesn’t come along and ruin it:

    [money.cnn.com]

  18. ab3i says:

    better late than never..

  19. doireallyneedausername says:

    @savvy9999:

    No, shareholders actually refusing to rubber stamp board-initiated proposals is activism. It’s challenging the status quo. I’m happy to report that I was one of those shareholders who exercised my rights to disapprove the re-election of the current board and approved all shareholder-initiated/activist proposals. Too bad my holdings in WaMu are still worthless. :(

  20. Interl0per says:

    I wish I could work somewhere that pays bonuses for company FAIL

  21. dragonfire81 says:

    Executives already get paid waaaaay to freaking much anyway. So one of them might get $7 million instead of $12 million. Boo hoo, cry me a river.

  22. Craysh says:

    Honestly, the mortgage companies shouldn’t have been forced by the Carter administration to make these loans in the first place.

  23. Craysh says:

    @dragonfire81
    Who are you to dictate how much a person should get paid? Are you in the Mortgage business and know exactly how much work and frustration is shoved into these peoples lives every day?
    If people aren’t compensated for the extreme headache that is this kind of business, nobody will work there and you’ll have to save your own damn money to buy a house.

  24. doctor_cos wants you to remain calm says:

    How exactly does this help the apparently small non-bank executive population in general?

    Sorry, don’t care.

  25. @Corydon:

    Every company’s common stock issuance is different. Sometimes common shares can’t vote, or require certain position sizes to vote, etc. The same goes for proposals and participation at shareholder meetings. Most companies use the board as the main shareholder advocacy entity.

  26. m4ximusprim3 says:

    @Craysh: I’m pretty sure that, for the amount of headache your waitress puts up with at $9 per hour, that argument maxes out at people earning about 70-80k per year.

    Anything over that is completely due to competition for people with a very rare skillset who are in the right place at the right time.

    Not that CEO’s don’t work hard, but awarding themselves giant bonuses and multimillion dollar salaries for totally forgoing their fiduciary responsibility to their shareholders borders on avarice.

    IMHO.

  27. spinachdip says:

    @doctor_cos: It helps plenty, especially when liquidity is at such a premium. If a big amount of funds aren’t tied up in executive bonuses, it can be redistributed to shareholders as dividend, or simply provide more capital for the bank to do business with.

  28. BStu says:

    @Craysh: The topic at hand is that shareholders DO have the right and obligation to dictate how much a company’s executives get paid. Its good to see some execs reigned in, but I fear this is a step that will continue to be reserved for extreme cases.

  29. Mr. Gunn says:

    Corydon: Yeah, I can see them now, walking up to the building with a wad of $100s, looking to buy stock.

    Actually, this would be much preferable to smashing shop windows and lobbing molotov cocktails, wouldn’t it?

  30. jmschn says:

    wow who’s the girl in that picture!

  31. Darkwish says:

    I love the pic used for this article!

    I need to open an account at WaMu just to get that shirt and wear it whenever I go to the bank.

  32. spinachdip says:

    @jmschn: I think she’s a model.

  33. ironchef says:

    best shirt ever.

  34. Geekybiker says:

    Now they just need make a proposal to tie the CEO’s salary/bonuses to the lowest salary in the company.